ITAT Delhi Judgments — January 2025

The Tribunal upheld the CIT(A)'s deletion of disallowances on A&M expenses, finding the reassessment proceedings to be without jurisdiction as the assessee had fully disclosed material facts during the original assessment. Additions under Section 14A were also upheld as per the CIT(A)'s order.

The Tribunal noted that the assessee had filed an application under the Vivad se Vishwas scheme and the Revenue did not dispute this. Consequently, the Tribunal dismissed the appeal as withdrawn.

The Tribunal upheld the CIT(A)'s decisions, finding that the interest expenditure was correctly claimed as a deduction under Section 36(1)(iii) as it was for business purposes. Similarly, finance costs for loans and indirect management expenses were deemed allowable business expenditures. The disallowance of land development expenditure was also deleted as the services were found to be genuine and rendered.

The Tribunal found that neither the assessee's claim nor the department's addition was fully acceptable. Therefore, it decided to assess the turnover at a lump sum estimated rate of 8% without setting a precedent.

The Tribunal admitted additional evidence filed by the assessee regarding the deposits in the bank account. However, since this evidence requires verification, the case was restored to the AO for a fresh examination.

The Tribunal held that the assessee is entitled to claim depreciation on road construction as an intangible asset, following judicial precedents. It also held that the 'negative grant' is an ascertained liability and part of the project cost, allowing its inclusion. Consequently, the PCIT's orders were set aside.

The Tribunal held that both the Assessing Officer and the first appellate authority ought to have conducted a proper inquiry and applied their mind, giving the assessee a reasonable opportunity of being heard. Therefore, the Tribunal restored the appeal to the file of the CIT(A) for a fresh decision.

The Tribunal partly allowed the appeal regarding commission income by adopting a reduced rate, and sustained the disallowance of certain expenses. The penalty for delayed tax audit report filing was upheld as no reasonable cause was established.